Oct. 22, 2009

Written by

editorialboard@thetowntalk.com

When International Paper Co. shuts its Pineville mill in December, it will close the doors on a highly competitive manufacturing facility and a major community stakeholder. The loss will be felt in the city, in Rapides Parish and elsewhere in Louisiana. The plant's footprint is that big.

Some were surprised at Thursday's announcement by the Memphis, Tenn.-based pulp and paper manufacturer because the Pineville mill has a reputation for producing high-quality material efficiently. When the company announced potential mill closings in July 2005 as part of a corporate restructuring, for example, the Pineville operation successfully met the firm's financial scrutiny and was declared a model of operating efficiency and quality.

But that was then, and this is now, and the challenges in the industry go back at least 20 years. Since the early 1990s, the pulp-and-paper industry has been responding to economic challenges that have become all too familiar to communities that exist in whole or in part because of big manufacturing operations in their back yards. Such is the case with International Paper and its storied presence in Pineville.

It wasn't so long ago that IP was stumbling along with mediocre profits caused largely by a stable of inefficient pulp and paper mills built in the 1920s and '30s. A $6 billion plan to modernize the company included this strategic step, according to IP's own history:

"To raise money for [CEO Edwin] Gee's plan, IP sold its remaining interest in General Crude Oil Company for $763 million and used the profits to buy Bodcaw Company of Dallas in 1979. Bodcaw added a highly efficient linerboard mill in Pineville, Louisiana, and 420,000 acres of prime timberland."

At the time, Bodcaw had been running its Pineville plant for 11 years, since the mill completed its very first production run on Aug. 12, 1968.

The efficiency IP saw when it bought the plant continues today in Pineville, but the return on investment is not what IP needs in 2009. Lots of factors affect that. Among those are taxes and energy costs, both of which are comparatively higher in Louisiana and have caused other manufacturers to close, relocate or not invest in Louisiana in the first place.

Smart lawmakers will pay attention, and act appropriately.

For now, however, we are left to watch as IP winds down an operation that has helped to set industry standards, has provided good jobs to thousands, and has been a true community partner.